FedDev Ontario launches suite of business support programs worth $530 million

Fed Dev Ontario has unveiled a new suite of programs worth $530 million to stimulate and diversify the economic engine of Canada's most populous province over the next five years. The Southern Ontario Prosperity Initiatives (SOPI) are largely business focused but encourage companies to secure the feedstock for innovation by collaborating with post-secondary institutions, not-for-profit research institutions, angel investors and other sources of risk capital.

Each of the four initiatives (see chart) targets collaboration and increased economic activity in specific areas of the innovation continuum with an emphasis on creating highly skilled jobs and exports. Projects under all four programs must be completed by the end of 2018.

"These programs are much needed. We partnered with FedDev on the SMART Prosperity Now program and helped between 600 and 800 companies" says Ian Howcroft, VP, Canadian Manufacturers and Exporters with responsibility for Ontario. "We hope to develop a new program with them to be able to work with SMEs (small- and medium-sized enterprises) on productivity issues and access to global trade."

Upon its renewal, Dr Gary Goodyear, FedDev minister of state, says he and agency officials hit the road to consult with companies and stakeholder groups before designing a new suite of programs to address current business conditions in the province. Efforts were made to limit the number of programs, in line with a recommendation from Innovation Canada: A Call to Action, the report of the Jenkins expert panel's Review of Federal Support to Research and Development.

The Jenkins panel urged government to "consolidate business innovation programs focussed on similar outcome areas into a smaller number of larger, more ?exible programs open to a broader range of applicants and approaches." With that in mind, FedDev has not given specific budgets to any of the SOPI initiatives, giving the agency the ability to move funding to where there's the greatest need or demand.

"There's no hard-wired maximum for any one program," says Taras Hollyer, FedDev's director of Program Policy and Innovation. "This gives us flexibility. We're looking for projects that give us maximum impact so it could be a smaller regional play or it could be for sector-wide issues or commercialization plays."

The business case of each applicant will be will be assessed by FedDev and its adherence to the agency's main objectives (innovation, market relevance and spillovers). Third party experts will be engaged where necessary. (For the AMF, Industry Canada will also participate in project selection).

The Investing in Business Innovation Initiative (IBI) is a re-launch of an existing program (Scientists and Engineers in Business initiative) to provide mentorship and entrepreneurial support for growing companies by connecting them to early-stage financial investment. The first round of IBI increased the number of registered and active angel investors from 280 to 900 and the new round is encouraging further angel investment by increasing the maximum level of support from $150,000 to $500,000. Angel investors from outside Ontario and Canada will also be encouraged. Other eligible entities include not-for-profit organizations such as incubators, accelerators and regional innovation and commercialization centres as well as venture capital.

Support ranges from $10,000 covering up to 50% of eligible costs for individual entrepreneurs to $1 million for up to one third of eligible costs for early stage businesses. Both are repayable while support for angel networks is non-repayable and covers 100% of eligible costs.

"We have significantly increased the amount of angel investment in southern Ontario," says Hollyer, referring to a recent report tracking the investments by the National Angel Capital Organization. "We've attracted angel investment from outside Ontario and Canada as well. It's a big success story for us. We've hit our policy imperative very directly."

The Investing in Business Growth and Productivity program — a successor to FedDev's Technology Development Program — targets growing firms with global potential. The program will provide repayable loans of up to $20 million and up to 25% of eligible costs

The Investing in Commercialization Partnerships (ICP) program is a classic multi-sectoral initiative to bridge the gap between research and commercialization. Up to $20 million in non-repayable contributions are available to post-secondary institutions and research institutions covering 50% of eligible costs. Projects must be business-led and aim to encourage capacity building, collaborative R&D, technology platform development and attaining a critical mass of R&D in emerging clusters.

The Investing in Regional Diversification Initiative provides grants of up to $20 million covering 50% of projects to diversify 11 targeted cities throughout southern Ontario. These cities tend to rely on as few as one industry or industrial sector for their employment base. Not-for-profits and community partners such as cities are encouraged to collaborate in projects that can include businesses from outside the province.

"The Windsor airport is a good example," says Goodyear, referring to the agency's investment in the Institute for Border Logistics and Security (R$, October 28/13). "It's about better quality jobs, upskilling of existing employees (and) returning the province to its natural state of prosperity."

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